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Tuesday, January 12, 2016, 15:18

China stocks close higher

By Agencies

SHANGHAI - China's stocks closed higher on Tuesday as financial stocks bounced and the offshore yuan strengthened.

The benchmark Shanghai Composite Index up 0.2 percent, at 3,022.86 points.

The smaller Shenzhen index gained 0.8 percent to close at 10,293.7 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, rose 1.95 percent to close at 2,147.53 points.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.7 percent to 3,215.71 points.

Among the most active stocks in Shanghai were CN Shipbuilding, up 3.0 percent to 8.24 yuan; Shanxi Coal, down 3.5 percent to 4.94 yuan and Nanjing Steel, down 6.3 percent to 2.97 yuan.

In Shenzhen, Hebei Steel, down 2.2 percent to 3.54 yuan; Myhome, down 5.8 percent to 5.35 yuan and BOE Technology, up 0.4 percent to 2.76 yuan were among the most actively traded.

Total turnover of A shares traded in Shanghai was 20.6 billion lots, while Shenzhen volume was 21.7 billion lots.

"Financial stocks have been under severe pressure recently and so it's not surprising to see a bit of a recovery today," said Zhang Qi, analyst at Haitong Securities in Shanghai.

"But there are still some uncertain factors including the big recent moves in the yuan, and investors are still cautious."

Sharp falls in major Chinese equity indexes in early January have been blamed in part by analysts on the big move down in the yuan in the first week of the year, which intensified fears of further depreciation and risked accelerating capital outflows.

In particular, some companies that have borrowed heavily in global dollar debt markets are increasingly planning early repayments of their dollar-denominated loans and bonds as the Chinese yuan's weakness extends into the new year.

In morning trade on Tuesday, the offshore yuan continued its sharp rise begun on Monday and by late morning had completely eliminated the price gap against the dollar with the onshore yuan.

Traders said that could be a move by Beijing to shore up confidence and dampen depreciation expectations by Chinese state banks, which is also sparking increased capital flight.

Shares may have also been boosted by reports that the State Council may take a stronger hand in financial market regulation following a series of perceived misteps over the past six months under the current regulatory regime.

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